- Tesla opened its first India showroom in Mumbai, displaying Model Y cars priced around $70,000
- Model Y prices in India are about 30% higher than US prices due to 70%-110% import tariffs
- Tesla has no current plans for local manufacturing in India, focusing on brand presence and demand
Tesla Inc. opened its first India showroom, showcasing Model Y cars priced at nearly $70,000, as Elon Musk's electric-vehicle maker looks to tap new markets and offset slowing sales where it's already well established.
A 4,000-square-foot space in Mumbai's financial district of Bandra Kurla Complex opened its doors on Tuesday with two Model Ys on display. The rear-wheel drive vehicle has a starting price of about 5.99 million rupees ($69,757) while the longer range variant is priced at 6.8 million rupees, Tesla's website showed.
That's almost a third more than the vehicle's starting price in the US without a federal tax credit - largely due to India's 70% to 110% tariffs on imported cars that Musk has long criticized.
The Tesla showroom saw a throng of curious onlookers and enthusiasts since early Tuesday morning as they tried to get a glimpse of the experience center despite heavy showers in Mumbai. Isabel Fan, Tesla's director for South East Asia, were among the company executives at the inauguration.
The long-anticipated India entry by Tesla comes amid challenges in China and the US, its two core markets. The company's sales fell last quarter and it's anxious to avoid a second year of declines after a dismal 2024.
The American EV maker has been ceding ground globally to Chinese rival BYD Co. and India represents an opportunity to grow in a market that's relatively untapped by global brands, due to a gamut of protectionist barriers.
A second showroom is expected to open in New Delhi by the end of July, and Tesla has beefed up local hiring and secured warehousing space.
But with no plans to set up a manufacturing plant in the world's third-largest automobile market, Tesla's entry into India is less about racking up immediate sales volume gains and more about gaging demand for its EVs and building up the brand's image.
Planting The Brand
"It's not meaningful from a volume standpoint yet," said Jay Kale, a Mumbai-based analyst at Elara Securities. "But it plants the brand. Over time, as charging infrastructure improves and the lineup expands, Tesla could scale."
Customers in India can begin placing orders later this month and the first deliveries are likely in August, Bloomberg News reported last week.
While the Model Y is the world's top-selling electric car, few Indians will be able to afford one. The country's EV penetration remains under 5%, and luxury cars make up just 1% of total vehicle sales.
Tesla will compete mostly with German luxury carmakers such as BMW and Mercedes-Benz Group AG, not mass-market budget-car players like Tata Motors Ltd., Mahindra & Mahindra Ltd. and MG Motor India Pvt.
Musk's company has flirted with the idea of establishing a local manufacturing base - something the Indian government has courted and that could sidestep heavy import tariffs - but so far Tesla hasn't committed to doing so.
Strained Relationship
India is currently negotiating a trade deal with the US, including a potential reduction in tariffs on automobiles - something Musk has been seeking for years.
It's unclear what impact, if any, the Tesla chief executive officer's newly strained relationship with US President Donald Trump may have on his company's lobbying efforts to lower Indian trade barriers.
The Tesla brand's debut in India follows the resignation in May of its former head of operations in the country.
